Running out of time to sell flip property, looking for options
Hi all,
Looking for some guidance, any thoughts on possible outs would be much appreciated. I've invested in/renovated a number of single family properties in the suburbs of Philadelphia (Mainline), with values ranging from $400k-$1.3m and decided to tackle a significantly larger project 6 months ago; comps were incredible with high sale prices and very low days-on-market, it looked like a home run.
The loan is under an LLC but with a personal guarantee; the renovations are complete and the house is beautiful, but the market has been unbelievably slow compared to the previous 3 years, on which our financials were based. We've been on the market since early Spring and despite significant price drops ($500k in total reductions), we're running out of runway before the loan maturates and funds on hand are depleted. Marketing has been fulsome, price reductions have been aggressive and though a refi into a longer loan is an option, we're not in a position financially cover the holding costs much longer. And, I'm personally on the hook for any loan defaults.
While we continue to aggressively drop the price and hold open houses, I've called number of cash-for-homes companies but have been told it's outside their typical purchase criteria. I'm considering approaching the lender about a deed-in-lieu-of-foreclosure, given the 7-figure difference between appraised value/loan balance, I'm hoping that would be a solid last resort.
Keen to hear if anyone has been through a similar situation and whether there's any other creative solutions I should consider.
Sincerely,
Michael